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OPINION

Minimum wage is supply/demand issue

By James Tashie, Special to The Commercial Appeal
Published 12:00 a.m. CT Jan. 29, 2017

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May 15 2014 - Josh Adams, right, chants with other protestors near the corner of Airway Blvd. and Lamar Ave. outside of a McDonalds while demonstrating for a $15 wage and right to form a union without retaliation in the fast food industry.(Photo: William DeShazer/The Commercial Appeal File)Buy Photo

Economists tell us that the markets determine the value of commodities. They also tell us that those values can and will fluctuate as a result of supply and demand.

Too much oil, the price goes down; not enough, the price goes up.

If we can think about the labor market in a somewhat similar way, we gain some understanding of how the number of workers within a business sector can affect their level of compensation.

The vast number of unskilled workers available to fast food employers, for example, means that they have no trouble finding workers to fill positions and can pay what is accepted as entry level minimum compensation for the job description.

Our own company, Malco Theatres has been in business for more than 100 years and currently employs more than 1,200 full- and part-time associates in our cinemas — many of whom would be in the minimum wage category.

Throughout our history, we have employed tens of thousands of teenagers who came to us seeking their ''first job'' opportunity. While employed with us, they learn the fundamentals of a how a business works, they learn structure and the importance of good customer service, especially when involved in a business that caters to the public.

For those who choose to stay around, they have opportunities to move up within our organization as theater managers, assistants or home-office personnel. Over the years, many have become permanent associates and remained with us until retirement.

As with many employers of young people, we start most out at or around the minimum wage with the understanding that after demonstrating a positive work ethic and a willingness to learn, their salaries will be raised. It would be very difficult to keep good people for any length of time if they are not given raises.

If a person is able to move from the minimum wage market and move into the far less crowded "skilled market,'' they will be rewarded with higher compensation.

Your time is what you are selling to an employer. Determining how much your time is worth is not easy, but generally speaking, the more education or training you have, the more pay you should receive.

It's understandable that not everyone is able to become a skilled laborer or a licensed professional. Electricians, computer specialists, psychologists, etc., usually have a set range as to how much the market will bear for their services.

The markets give us an indication of what the accepted pay range is for most positions, from executives to janitors. There will always be exceptions, but generally speaking, the range for skilled laborers is determined by the markets they operate within.

There is a need for adjustments to the current minimum wage, but we hope that it will be done in a responsible, well-thought-out manner. If we go too far and too fast with an across-the-board policy, there could push back from businesses in the form of layoffs and a reluctance to hire.

This issue should not be a “cause célèbre” for those who see it as a campaign issue and a way to secure votes by promising higher wages.

We see robots, drones and artificial intelligence beginning to replace some positions once filled by unskilled and even some skilled workers. We've seen auto workers displaced by robots and now McDonald's is seriously experimenting with kiosks in many of their establishments. They view them as a way to reduce labor cost and eliminate the weight of governmental regulations on employment.

I believe this move toward automation and the ongoing adoption of new technologies will continue to gain traction and put more pressure on the unskilled worker to rise above the minimum position. There always will be a need for essential services provided by the skilled worker.

One question worth considering during the discussions is this: Does it make sense to pay a 16-year-old, working a first job, living and eating at home and covered under a parent's health plan, the same hourly pay that you would pay to a single parent, performing the same work, but also raising a child and paying all associated living expenses?

As the push for a higher minimum wage continues, we should also be pushing for more vocational schools and more technical schools, where individuals learn useful and necessary skills that offer a way to earn a true "living wage.”

James Tashie is executive vice president/principal of Malco Theatres, Inc.